Is the centre-left dead?

Branko Milanovic raises a question: is liberalism (or centre-leftism) dead?

There’s a precedent here. In the 1970s the combination of rising inflation and high unemployment killed off post-war social democracy in much of the west: Marglin and Schor’s The Golden Age of Capitalism provides a great analysis of this. The precise date of the death varied from country to country. In France it came in Mitterrand’s “austerity turn” in 1983. In the UK it perhaps came with Callaghan’s claim that you can’t spend your way out of recession in 1976. Whatever, the fact is that in much the of the west old-style social democracy was killed off and it took Clinton and Blair to reincarnate it in rather different form.

Does liberalism/centre-leftism today face a similar threat?

There are reasons to think not. It’s not inconceivable that the Democrats, UK Labour party and French Socialists will one day find electable candidates. And some of the centre-lefts flaws – imagined or real – can be easily fixed. The identity politics and elitism that has devalorized working class experience is remediable; class politics and identity politics are to some extent at least complements not substitutes. It is technically possible to spread the benefits of globalization more widely through better redistributive policies. And the likely failures of Brexit and Trumponomics might well cause some kind of backlash.

There is, however, a more pessimistic reading.

For one thing, we might not see the sort of backlash we want. If or when immigration controls and protectionism are seen to fail to increase jobs and wages, nativists won’t realize the errors of their ways and repent. Instead, they’ll double-down and claim that claim that their policies didn’t go far enough.

And in this they might win public support. The victories of Trump and Brexit, and rise of the National Front in France and AfD in Germany all vindicate Ben Friedman’s point that economic stagnation makes people meaner. It causes a rise in right-wing extremism, not leftism.

Also, there are at least two flaws in liberalism/centre leftism that aren’t so remediable, at least without transforming its essential character.

One is that it has been managerialist. Perhaps Blair’s greatest fault – shared perhaps with US Democrats - was his faith in top-down leaders. This had many baleful effects, among them stagnant productivity in public services, the legitimation of the increasing wealth and power of the 1% and the Iraq war. It also generated a backlash against the “liberal elite” and a demand to “take back control.”

The other is that the centre-left took economic growth largely for granted. New Labour believed that if it could provide stable macroeconomic policy and an attractive location for investment then growth would follow. That might have been the case in the 90s. But it isn’t true in our new era of secular stagnation. We need supply-side socialism.

I think it’s possible for there to be a left which is open, liberal, non-elitist and economically efficient. We might hope that such a new left will eventually emerge from the ashes of centre-leftism and populism. My fear, though, is that by the time this happens there will be a terrible lot of ashes.

Comments

[Patrick Kirk]

Great article, particularly about the managerial approach to politics. If the only big difference between Tory and Labour is the admin skills in running the economy, then its going to be hard to ever effect meaningful change of any kind. No wonder voters tune out.

[Jim]

"liberalism (or centre-leftism) dead"

No it isn't, because what is termed the Right is pretty much what would have been centre leftism not that long ago. In practical terms there is nothing between the governments of Cameron or May vs those of Blair.

Now the usual suspects will say this is 'proof' that Blair was a Tory, the Tories are baby eating B*stards etc etc, all the usual Tory Scum agit prop.

What is in fact the case is that the UK State taxes and spends in the mid 40s as a percentage of the economy. That is de facto centre leftism. It it were 5-10 points lower one might say it was centre rightism, if it was sub 30% then hard rightism. All the rest is just managerialism - who wants to spend how much on what. Party A wants spending on this and not that, and taxes on this and not that, and Party B vice versa. Whats not in debate is the amount they are going to tax and spend.

The 'death' of the Left is down to them retreating further and further down a weird SJW identity politics type cul de sac, and rather than celebrating that in fact they are winning or have won many of the arguments of government, deciding to label as far right extremists anyone an inch to the right of their current position. This behaviour never ends well electorally, and is guaranteed to entrench their opponents in government.

[e]

I hope you're right on the possibility of a new left: an alliance, because an alliance it must be. A wilfully blind liberal left using economic social conditioning tools (sanctions, housing, education, access to a life costs) has lost control of the political stage. Good/inevitable. Idiots. Only I fear you're right: nativists looking only for a better deal, without support, will double-down; and copying “their betters”, continue to look the other way. How much time do we have?

[Dipper]

Spot on Jim

[dilberto]

Politics is adaptation, the rise of the centre left parties like new Labour was the result of the political class adapting to the expansion of the middle class demographic, just as the decline of that demographic, a consequence of developed economies reaching the limits of their capacity for economic growth and entering the era of secular stagnation, has led to the rise of what many in that declining middle class demographic now term, pejoratively, "populism".

[Darren S]

It's not simply the level of government spending that defines left/right. That's overly simplistic. PFI was pro-capital and anti-social. Traditionally right. Spending on the military and law and order versus welfare and tax collection. I could go on. The level of government spending is not the key factor.

[Jim]

"The level of government spending is not the key factor."

The two 'right wing' elements of public spending, defence and criminal justice add up to about 10-11% of the total current UK budget. The rest is entirely of a social welfare nature - pensions, benefits, health, education, housing, environment, transport, overseas aid, etc etc. All of which are in reality of a social democratic nature (ie centre left). They aren't what one would consider a true right wing government would be spending 90% of its revenue on. Given that health, pensions and education have all been ringfenced from any cuts by the present governments, one can hardly say that they are presiding over some pared down low tax small state version of government. Free market small state let the devil take the hindmost libertarianism it ain't.

I mean, if you are on the Left you should be pleased that a nominally right wing government that has an absolute majority and could do as it pleased is happy to tax and spend 43/44% of GDP and redistribute it as it does. But they aren't and demand more.

The Left have gotten themselves into a state where whatever is done by the people they consider to be their enemies must by definition be 'bad' and must be opposed by all means possible, regardless of any logical or intellectual consistency. Thus we see people demanding we stay in the Single Market, that a few years ago they were condemning as a ramp for big corporations, allowing tax avoidance by Amazon/StarbucksGoogle et al. Equally, a big infrastructure project such as Trumps wall would have been manna from heaven had it be proposed by Paul Krugman, but its Trump so must be opposed. We see the Democrats in the US defending free trade, and Wall Street, just because Trump says he's going to reduce free trade and make big corporations stop outsourcing jobs overseas, something the Left have been banging on about for ages. Its a perpetual childish opposition to authority transposed to a national adult scale.

[TrumpisaJew]

Nothing personally Jim, but Trump is a electoral creation that is a blowhard.

Nothing he says will matter in these regards if he continues down the road of supply sided economics. Nor is there any "big infrastructure" program. The fact you fell for that, dismisses you.

The single market is the market Jim. Without it, Europe is irrelevant for bourgeois politics. Even Hitler got that in 1939 when he was laying the foundations of the "EU".

[TrumpisaJew]

on the "left" itself, they don't exist anymore. Centre-Left is a excuse for "moderates". But no industrial policy, no command economy of investing, you aren't really "left" nor "centre-left".

Just give it time, by 2020, everybody will be sick of the same ole neo-liberal games. You will get more "centre-left" in there while nostrils flare. I am amazed at the poor quality of posts. Sorta like UK immigration. Passing the buck to the EU when every little "nation state" inside the EU sucks at controlling immigration from non-EU nations and then whines about each other's "immigrants" crack me up. Just like Trump and his "Mexcrement" whining while the "Yellow Hoard" flies into the US pacific borders with no check, probably a trade that Trump is making money from.

Politics needs a laxative today. The dialect needs to be crushed.

[Blissex]

«Perhaps Blair’s greatest fault – shared perhaps with US Democrats - was his faith in top-down leaders»

R Hattersley in 2001 commented on a related topic:

«www.theguardian.com/politics/2001/jun/24/labour2001to2005.news
«Tony Blair discovered a big idea. His destiny is to create a meritocracy. Unfortunately meritocracy is not the form of society which social democrats want to see.»
«Now that the Labour Party - at least according to its leader - bases its whole programme on an alien ideology, I, and thousands of likeminded party members, have to decide if our loyalty is to a name or to an idea.»
«A Labour government should not be talking about escape routes from poverty and deprivation. By their nature they are only available to a highly-motivated minority. The Labour Party was created to change society in such a way that there is no poverty and deprivation from which to escape.»

[Blissex]

«the combination of rising inflation and high unemployment killed off post-war social democracy in much of the west»

My argument, and Blair's argument in 1987, is that the prosperity created in the post-war years by social-democratic policies elevated much of the low-income and middle-income classes into property-speculating middle and upper-middle classes, and these people promptly betrayed the social-democratic parties, and became "Blow you! I am allright Jack" petty rentiers, the legendary "conservatory building classes" who "shop at Waitrose".

The terrible "mistake" of Clinton, Blair etc. was to champion mostly or even those classes and their rentier instincts instead of persuading them that the continuation of social-democracy was the best guarantee of their vested interests.

[Blissex]

«The rest is entirely of a social welfare nature - pensions, benefits, health, education, housing, environment, transport, overseas aid, etc etc. All of which are in reality of a social democratic nature (ie centre left).»

A lot of that is corporate welfare, directly or indirectly, reducing the costs of businesses or outright handouts.

But for me too the size of government spending is a misdirection, and what matters is the redistributive effect of government spending more than it size as such.
The right wing objects only to "big government" when that means that the lower classes are given more leverage by government support, for example of trade unions.

Modern first-world states have been called "insurers with an army". Pure insurance is neither left or right wing, and a large part of the insurance function of the state is not redistributive, and it is part of state functions on impeccably conservative arguments about value for money (natural monopolies, asymmetrical information, moral hazards, economies of scope, ...).

Also, a right-wing government can run a state that taxes and spends a lot as a "company store", and there is a strong element of that even presently.

What the bulk of the right-wing object to is not group purchases for things like roads or insurance pools for things like healthcare, but that the poor are effectively given insurance against having been born poor or having become poor.

That is the real problem, and it is not because the right hates or spites the poor (many do of course). It is because the right want to intimidate the skilled working class and the middle classes with the terror of the absence of a safety net, with the vivid examples of what could happen to them if they are not cheap and docile with their superiors.

https://medium.com/@timmaughan/zero-hours-f68f17e8c12a
"Starbucks, the holy fucking grail."

The "workhouse" or the beggars dying of cold have always been an object lesson not to the poor as such, but to the bulk of the skilled and middle class workers. Hit one to educate hundreds was invented by the right a long time ago.

[David]

The chat about the "rentier class" is maybe well founded.
But if you have a pension (in the UK that is.. some other countries do not fund pensions through investments) you are a member of that class.
My "buy to let" investments are my pension.
Your pension could well include "buy to let" investments without your knowledge. It will certainly include stock and bonds.... other "rentier" classes.

I say "well founded" because indeed some people have considerably more "rent" than they "need". But others, like myself, have invested our savings in well maintained property that provides a service that is sadly lacking government funding.
With proper funding the market would dissolve.
David.

[Luis Enrique]

did you see D2's prescient CT post on this?

http://crookedtimber.org/2009/10/05/twilight-of-the-reds-pinks/

I can't argue with the diagnosis of the centre left's failings. I wish there was more said on if not centre left, what? IMO the centre left needs to do things differently, but not stop being the centre left.

[Blissex]

«the "rentier class" [ ... ] But if you have a pension you are a member of that class. [ ... ] My "buy to let" investments are my pension.»

I don't mean that "rentier" status, whether from pension property or residential property, turns people into monsters :-).

But the economic incentives and thus *usually* the ideology of "fixed income"/"capital gains" rentiers are well known: they vote for lower wages and pensions for everybody else, for bigger asset prices and tax cuts for themselves.

But in very different degrees for those who made a fortune by buying property in the 1970s and 1980s or inheriting it, and those who get a proper state funded, that is in practice GDP-per-capita-linked, pension.

People with a good state pension with low admin costs instead of buy-to-let property speculation (because most buy-to-let is founded on the expectation of capital gains) have rather less extreme "rentier" attitudes.

But consider the political implications: if the only options for retirement are selling matches on street corners or buy-to-let rentierism, which is necessarily limited to the most affluent 20-30% of workers (there need to be 2-3 renters per rentier), workers in the middle and upper-middle class will live in the permanent terror of losing their job, becoming ill, or whatever else that might prevent them from gaining entry to the minority of buy-to-let "winners".
I have met several decent, even generous, buy-to-let rentiers, but their individual character is not the issue, it is the overall picture.

[Blissex]

«those who get a proper state funded, that is in practice GDP-per-capita-linked, pension»

As to this consider the rather different incentives for pensioners on a price-index linked pension and a wage-index linked pension.
Price-index linked pension create a large block of voters for pushing down wages and keeping a strong currency, for example.
Every little helps :-)

[D]

Chris, interested in your views on the following.

The benefits of globalisation are small at the margin. Hence the costs of some protectionism are also small.

The benefits to some US workers of some protectionsim could be big. It could be big ennough to keep, for example, rust belt states pro trump.

Trump could present these benefits to be bigger than they are(a la reaganomics. Coupled with a far economic wind following a long period of below potential growth Trump and his policies could come out of all this looking pretty good to the man on the street.

[Blissex]

«the diagnosis of the centre left's failings»

I reckon, same as the young T Blair, that those are the failings of newly-minted middle class voters that the old centre-left created from their low-income base, including the famous "Sierra man".

But to describe some of the contemporary "centre left" parties as such is a failing too: thank to a commenter on a blog I discovered that some academics have been tracking the political positioning of UK parties over decades, and New Labour for example was rather a cemtre-right party:

http://discussion.theguardian.com/comment-permalink/82845302
«Ted Heath Tories 1970s (+3) Labour 2015 (+4)
A score of (+5) is perfectly centre-right. The Scottish Socialists 2015 are in (-7), Greens 2015 are on (-3), SNP 2015 on (-1), LibDems 2015 on (+5), UKIP 2015 on (+8) and the very right-wing Tories of 2015 on (+9).»

[Keith]

I find this narrative by Jim bizarre, that some how this Tory government and the coalition before are secret social democrats. If you pay attention you will see that public spending including on the NHS is falling as a share of GDP not rising. Social care budgets have been savaged and the benefit cap sanctions and decoupling of benefits from prices and cuts to all programmes that redistribute make this Cabinet far removed from any social democratic programme. The care cuts mean the NHS is unable to look after the old properly, and an aging population requires far more spending on care needs and the NHS. Only people very insulated from what is actually happening in the country could write this bland waffle.

[Keith]

And while I am about it, not only has the mainstream left cocked up with their third way bollocks, the liberals have betrayed keynes and beveridge. Their ignorant parroting of far right osbourne inspired macroeconomic lies disqualifies them as a party of intellectuals or ideas. What use do they serve? I would like to know. It is remarkable for them to join the stupid party and become stupid as well.

[Tynnie Todgers]

The centre left is buggered because it bought into neo-liberalism. It colluded in structural changes which entrenched inequality and labour casualisation, and cannot now present a coherent narrative to the precariat it helped to create.

[Denis Drew]

Seemingly forever out of focus is that most all today's $10/hr US jobs (e.g., Walmart cashier) could plausibly pay more like $20/hr -- with German level union density. Given that 45% of today's US workforce is earning $15/hr or less this seems to make debating about a few percent more or less available manufacturing jobs blamed on this or that, or debating over class v identity politics -- far from the defining issues of our time.

[cut-and-paste]
THE MONEY IS THERE SOMEWHERE

You can't get something from nothing but, believe it or not, the money is there, somewhere to make $10 jobs into $20. Bottom 45% of earners take 10% of overall income; down from 20% since 1980 (roughly -- worst be from 1973 but nobody seems to use that); top 1% take 20%; double the 10% from 1980.

Top 1% share doubled -- of 50% larger pie!

One of many remedies: majority run politics wont hesitate to transfer a lot of that lately added 10% from the 1% back to the 54% who now take 70% -- who can transfer it on down to the 45% by paying higher retail prices -- with Eisenhower level income tax. In any case per capita income grows more than 10% over one decade to cover 55%-to-45% income shifting.

Not to mention other ways -- multiple efficiencies -- to get multiple-10%'s back:
squeezing out financialization;
sniffing out things like for-profit edus (unions providing the personnel quantity necessary to keep up with society's many schemers;
snuffing out $100,000 Hep C treatments that cost $150 to make (unions supplying the necessary volume of lobbying and political financing;
less (mostly gone) poverty = mostly gone crime and its criminal justice expenses.

6% union density in US private employment is analogous to 20/10 blood pressure: it starves every other healthy process.

[Jim]

@Keith: the point is we have (according to the Left) a baby eating right wing bastard Tory government, dark blue in tooth and claw. The spirit of Sir Keith Joseph roams the land, terrorising social provision wherever it may be hiding, shivering in a corner.

Yet what do we actually see? Is this right wing government introducing education vouchers and abolishing all State run schools? Is it introducing private insurance for healthcare and abolishing the free at the point of delivery system? Is the Welfare State no more, replaced by some modern equivalent of the Workhouse? No its not. These right wing monsters may not be spending what you would like on social programmes, but the principles of what underlies the system they seem quite content with are middle of the road social democracy. For all the Lefts daft '100 days to save the NHS' etc bollocks which gets wheeled out at every General Election, somehow the NHS is still here. As is the Welfare State, State education for all, State pensions etc etc. All of which are Social Democracy to a T.